Back around 1999, when new products were being introduced as fast as you could put up a website, brand building underwent a quiet revolution.

With markets moving at warp speed there simply wasn’t time to build trust and reputation the traditional way – by advertising. In that super-heated environment the best way to build a brand was to get people to actually try the product. If you could manage to get trial, if the dogs ate the dog food, if they came back to buy again, and if they told their friends, then maybe you had a shot at survival.

The markets haven’t cooled. If anything they’ve heated up. And I still believe that persuading a prospect to try your product or service can create more brand equity faster than all the 30-second Super Bowl spots you can afford. Generating trial is still the best branding strategy I can think of.

The irony is that once a prospect has tried the product – once he’s actually become a new customer – he is virtually ignored because he doesn’t represent much revenue and therefore isn’t part of the elite ‘best customer’ list – even though he represents a terrific brand-building opportunity.

Of course every new customer isn’t a potential ‘best customer’ and finding the good prospects in a new customer list requires analysis. If you’ve been interested in customer analytics you probably know something about RFM (Recency, Frequency, Monetary value) analysis. It’s a helpful way to segment customers, but its not much help analyzing ‘newbies’ because while they’ve bought recently, they don’t have an established frequency of purchase, and the amount they’ve purchased puts them at the bottom of the customer list in terms of revenue.

Fortunately there are some more polished analytics tools (Longbow is one) that go beyond RFM and can help identify new customers who have great promise. All you have to do is be wise enough to recognize their potential and market to them with the care and respect they deserve.

Promising new customers are teetering on the brink of brand loyalty. Your first task is to bring them back for a second purchase. With appealing offers (and a test program to confirm which offers work best) you will build your brand and your revenue at the same time. In effect you’ve created a branding effort that pays its way.

Branding, as practiced by the gurus, tries to build trust, reputation, and loyalty without any real transactions between sellers and buyers – an ivory tower exercise that burns marketing dollars without assuming any responsibility for revenue. I’ve come to believe it’s a luxury that even rich companies can’t afford these days. Branding by building on a good customer experience is the better way to go.

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